Report: Overtime shorting program

Audit says state employees get benefits that cost insurance plans

February 12, 2013

CHARLESTON - An audit report says West Virginia state employees annually receive millions of dollars in overtime and other compensation beyond their basic pay, and it could be costing their health insurance plan millions of dollars each year. The reason: That money isn't counted when the program looks at pay to calculate premiums and out-of-pocket deductibles.

The report released to legislative leaders Monday also found that some salaried employees routinely receive overtime, and some public workers are paid more than $100,000 in overtime a year.

Auditors suspect that at least some agencies have paid their salaried staff that way to conceal their actual compensation. Legislative Auditor Aaron Allred recommended that the Division of Personnel identify the employees who fall under the federal Fair Labor Standards Act, which guarantees overtime, the ones do not and others who appear to fall in between the two groups.

The audit did not estimate the cost of the inadequately calculated premiums to the Public Employees Insurance Agency, but noted that 3,346 state employees each received at least $5,000 classified as overtime during the past budget year - or a minimum total of $16.7 million. The health plan for public employees bases premiums and deductibles on ability to pay.

"If half of them should be paying another $1,000 in premiums, that's $1 million that should be going to PEIA," Allred said.

Marshall University head football coach Doc Holliday topped the audit's list with pay classified as overtime at $425,000. Auditors noted that Marshall and other public entities may be listing other forms of compensation as overtime in their payroll records.

Matt Turner, chief of staff to Marshall President Stephen Kopp, said the school uses a category in the payroll system to denote a variety of pay other than salaries. It includes supplemental compensation and extra duty pay, Turner said Monday. None of the money for Holliday or other Marshall employees who made the audit's list reflects overtime, Turner said.

The audit found five other state employees who reaped six-figure amounts beyond their salaries. Three are health professionals at Mildred Mitchell-Bateman Hospital, each receiving between $124,000 and $172,000, while another was a plumber at the Huntington hospital and received $100,701, auditors said. A spokeswoman for the Department of Health and Human Resources, which oversees the Bateman hospital, did not immediately respond to a Monday request for comment.

Of the others in the overtime pool, 33 received between $25,000 and just under $35,000.

"If you have someone making $30,000 a year in overtime, that really should be included in calculating their PEIA premiums," Allred said.

Some of the hefty overtime payouts may reflect staff shortages in some agencies, lawmakers noted. Agencies requiring employees to work overtime include the Regional Jail and Correctional Facility Authority. The latter is also among the 64 agencies that paid out at least $5,000 in overtime to one or more employees last budget year.

Several lawmakers expressed surprise that salaried employees have been paid overtime. Senate Finance Chairman Roman Prezioso, D-Marion, questioned whether the overtime is counted toward state pensions, which are based on final salaries and years of service. Allred said the Consolidated Public Retirement Board tracks overtime to calculate benefits.

"The left hand doesn't know what the right hand is doing," Prezioso said, contrasting the retirement board with PEIA.